Many listed companies in Bangladesh face growing pressure to raise their paid-up capital, a move encouraged by the Bangladesh Securities and Exchange Commission (BSEC) to combat stock price manipulation. While regulatory authorities argue that stronger capital bases will improve market stability and transparency, about 60 firms have yet to comply—among them well-known names like Reckitt Benckiser, Bata Shoe, and Linde Bangladesh. At the end of May, the BSEC even asked these firms to submit detailed roadmaps for meeting the new capital requirements. The core issue lies in striking a balance. On one hand, increasing paid-up capital can support business growth, facilitate investment in infrastructure, and enhance resilience. On the other hand, many companies are hesitant, citing concerns over diluting returns or investing in an environment with limited expansion opportunities. Multinational giants such as Reckitt Benckiser and Linde contend that their healthy cash flows and strong profitability make additional capital unnecessary. These companies argue that they hold sufficient financial strength without raising extra equity. In contrast, struggling firms such as Aziz Pipes, Savar Refractories, Jute Spinners, and Meghna Pet Industries fear that raising paid-up capital could worsen losses. Aziz Pipes, with a paid-up capital of only Tk53.47 million, has reported continuous losses into the financial year 2023–24. For such companies, increasing capital now may do little more than dilute remaining earnings among investors. Market watchers advise that simply raising paid-up capital won’t address issues like stock price manipulation if enforcement and regulatory vigilance remain weak. Examples like Khan Brothers PP Woven Bag Industries, which saw its stock surge 975 percent in early 2024 despite weak fundamentals, show that large capital bases alone cannot stop speculative spikes. Kyser Hamid from the Bangladesh Association of Publicly Listed Companies (BAPLC) argues that a one-size-fits-all approach is unfair. He suggests that capital requirements be tailored to each company’s real growth plan and financial strength. Some firms are seeking BAPLC’s support in negotiating with BSEC to avoid being downgraded or moved to secondary boards like SME or Alternative Trading Board—actions that could undermine investor confidence. The dilemma reflects wider issues in Bangladesh’s corporate sector: a push to strengthen financial foundations versus practical business realities. The BSEC’s intention to enforce better capital standards is clear, but its success will depend on engaging listed companies constructively and understanding their individual circumstances. Without that, the policy risks being perceived as pressure rather than progress. For the country’s capital market to evolve, regulators, industry bodies, and companies must collaborate. Effective capital-raising practices, strong corporate governance, and proactive regulatory oversight can together build a more resilient and trustworthy market. That change could help Bangladesh’s listed companies grow responsibly while earning greater investor trust.
